explanation is that due to higher liquidity the most recently issued bond tends to trade at a premium to previously issued bonds …, liquidity has commonality across countries in the expected direction. However, the paper documents a novel finding that … questions the standard view of liquidity. Under certain conditions, especially related to credit deterioration and flight to …

corporate liquidity. These relations are more pronounced in larger, less risky firms whose debt is a closer substitute for … competition for Treasury securities. In concert, our results suggest that large, financially healthy corporations act as liquidity …

We examine whether there is a flight-to-liquidity premium in Treasury bond prices by comparing them with prices of … bonds issued by Refcorp, a U.S. Government agency, which are guaranteed by the Treasury. We find a large liquidity premium … in Treasury bonds, which can be more than fifteen percent of the value of some Treasury bonds. This liquidity premium is …